The memory chip market has reached an inflection point: Samsung takes the lead in cutting production, and customers accept rising chip prices

On September 13, the Korea Economic Daily revealed that Samsung has signed memory chip supply agreements with customers including Xiaomi, OPPO and Google. The prices of DRAM and NAND flash memory chips have increased by 10% to 20% compared with the existing contract prices. . Samsung predicts that the memory chip market may be in short supply starting in the fourth quarter. These mobile phone manufacturers may have expected an increase in smartphone sales, especially in overseas markets, and therefore accepted the price increase.

On the other hand, Samsung also plans to supply memory chips to its own mobile business unit that produces Galaxy series mobile phones at higher prices to reflect the trend of rising mobile chip prices.

In addition, according to Taiwanese media reports, upstream NAND Flash original manufacturers such as Samsung, Kioxia and SK Hynix have begun to increase wafer contract prices. As the inventories of intermediate channels and downstream system module factories are lower than normal levels, terminal rushes are triggered, and the prices of consumer SSDs, memory cards, and mobile phone-related components such as eMMC and eMCP rise across the board. The supply chain said that the current average increase is about single digits, and due to the relatively low inventory levels of some storage products, the increase in the fourth quarter is expected to reach double digits.

TrendForce pointed out that South Korean memory chip manufacturers have decided to increase the price of their latest chips, and the price increase may continue into the fourth quarter.

Another research report by TrendForce also showed that NAND Flash Wafer contract prices have rebounded in August, and as production cuts expand, customers' stocking efforts are expected to pick up, effectively supporting the continued rise in NAND Flash wafer contract prices in September. The agency predicts that the average price of NAND Flash in Q4 is expected to remain flat or rise slightly as a result, with a month-on-month increase of approximately 0~5%.

In addition, industry insiders revealed that NAND flash memory customers no longer cut orders and began to increase orders.

However, the price increase is not limited to NAND flash memory - in the DRAM market, thanks to new smartphone-related storage products such as LPDDR5X, DRAM chip prices have also begun to gradually rise.

Memory chip manufacturers are embarking on further reductions in actual capital expenditures and wafer inputs, by even more than 50%. In this case, the supply of DRAM and NAND flash memory bits may drop by more than 10% this year.

With industry leader Samsung's production reduction measures, the storage market seems to have reached an inflection point. Cinda Securities pointed out that the effect of production reduction at original storage plants has appeared, and the effect of inventory reduction is obvious. And with the arrival of the peak season for market stocking, the overall pace of shipments has accelerated, prices may have reached an inflection point, and the storage cycle is expected to start recovering.